Some older student-loan borrowers have been paying off their debt for decades — and it could eat into their retirement plans.
A new report from the New School’s Schwartz Center for Economic Policy Analysis looks at how student-loan debt is weighing down workers who are gearing up for retirement and how that debt has diminishing returns for any would-be retirees.
Using data from the Federal Reserve Board’s 2022 Survey of Consumer Finance, the analysis found that more than a million Americans ages 55 to 64 were holding student loans or had spouses with loans. Gen Xers and boomers are also set to be saddled with that debt for years to come.
And the burden of that debt appears to fall disproportionately on the lowest earners. Looking at debtors over the age of 55, the Schwartz Center calculated that just 3.7% were in the top 10% of earners, or those making more than $192,000. Conversely, it found 50.3% were in the bottom half of earners, making below $54,600, and 46% were in between, making $54,600 to $192,000.
The analysis found that Gen Xers and younger boomers still expected their student debt to loom well into retirement age; on average, respondents to the Fed’s survey ages 55 to 64 said they expected it’d take 11 years to repay their loans, meaning many would be saddled with that debt well into retirement.
Many older Americans already find themselves living off of less than $30,000 a year, with many reliant on Social Security to stay afloat — or some just unable to retire altogether.
Read full story at Business Insider.
